RNS Number:6686B
Ted Baker PLC
5 April 2001
5 April 2001
Ted Baker PLC
Preliminary Results for the 52 weeks ended 27 January 2001
Highlights
* Turnover up 28.1% to #47m (2000: #36.7m) - reflects active management
of the brand, the success of the Endurance range and the addition of new
product lines
* Profit before tax up 3.7% to #8.2m (2000: #7.9m) reflecting increased
infrastructure costs to support growth and Christmas trading below
expectations
* Earnings per share 14.3p per share (2000: 14.1p per share)
* Final dividend of 4.6p per share, making a total for the year of 7.0p
an increase of 11.1%
* Development of the Ted Baker brand continues:
- Ted Baker Woman sales strong, up 35.8% to #18.2m (2000: #13.4m) -
38.7% of total sales
- Success of the Ted Baker Endurance crease resistant suits range -
one of the best selling suits in the UK
- Introduction of the Teddy Girl collection which takes childrenswear
range up 31.5% to #1.23m (2000: #939,000) - 2.6% of total sales
- Footwear licence with Pentland Group PLC
* Important investment in infrastructure for the long-term benefit of
the group
* Addition of new retail space with the opening of 6 new stores in
Hampstead, King's Road London, Manchester, Birmingham, Richmond and Canary
Wharf
* Continued development of wholesale with sales up 46.2% to #17m (2000: #11.6m)
* Master licence agreement for the North, Central and South America
signed with Hartmarx
Commenting on the results, Ray Kelvin, Chief Executive, said:
"The important investment made in the relocation of our headquarters and
warehouse this year was key for the effective management and long term
expansion of the Ted Baker brand. Our objective is to build a global brand
through the development of successful new product lines and markets. We are
confident that the strength of our brand and the new infrastructure will
ensure continued growth in the future."
Enquiries:
Ted Baker 020 7796 4133 (Hudson Sandler) on 5 April, 2001
and thereafter 020 7255 4800
Ray Kelvin, Chief Executive
Lindsay Page, Finance Director
Hudson Sandler 020 7796 4133
Piers Hooper/Noemie de Andia
Visit our investor relations site at
http://ww2.investor-relations.co.uk/tedbaker/
Visit Ted's award winning e-commerce site at
http://www.tedbaker.co.uk
Chairman's Statement
The 52 weeks ended 27 January 2001 were a period of significant achievement
for the Ted Baker Group. We continued actively to develop our retail and
wholesale businesses while at the same time relocating both our head office
and distribution centre, which provide a greatly improved infrastructure for
the next stage of our growth and an excellent showcase for the brand.
At the same time our strategic goal to develop a world brand took an important
step further forward with the signing of a master licence agreement for the
Ted Baker brand in North, Central and South America. As previously reported
our results for the year were adversely affected by the transport difficulties
which impacted on the Christmas trading environment.
Nothwithstanding this, turnover increased by 28.1% from #36.7 million to #47
million for the 52 weeks ended 27 January 2001 and operating profit increased
by 6.4% from #7.86 million to #8.36 million. Profit before tax increased by
3.7 % from #7.87 million to #8.16 million and earnings per share were 14.3p
compared to 14.1p.
The Board is pleased to recommend a final dividend of 4.6p per share (2000:
4.2p) making a total for the year of 7.0p (2000:6.3p) an increase of 11.1%
over the previous year. The final dividend will be payable on 22 June 2001 to
those shareholders on the register on 17 April 2001.
We have made an encouraging start to the new financial year with total retail
sales ahead by 42.9% for the first nine weeks, compared with the same period
last year and in line with our expectations. Wholesale sales for the same
period are 15.7% ahead, again in line with expectations, and we have had a
strong reaction to our new jean collection which is being launched for Autumn
2001.
I am delighted to announce that we have entered a licence and distribution
agreement with Pentland Group PLC for footwear and footwear accessories which
will build on our initial success in this market.
In order to focus more actively on their operational responsibilities, Donald
Browne, Production Director, and Peter Renn, Merchandise and Retail Operations
Director have decided to step down from the PLC Board with immediate effect.
The day to day management of the Group is carried out by Ted Baker's
Operational Board, on which Donald Browne and Peter Renn will continue to sit
as directors.
I would like to thank each member of the team at Ted Baker for their
continuing commitment and contribution which has helped to ensure another
successful year for the business.
Chief Executive's Review
Collections
Our main collections, Ted Baker and Ted Baker Woman, continued to perform
strongly during the period with menswear increasing by 23.2% from #22.4
million to #27.6 million.
The performance of menswear was enhanced by the success of the crease
resistant "Endurance" suit which established itself as one of the best selling
suits in the UK.
Womenswear recorded growth of 35.8% from #13.4 million to #18.2 million as we
continued to extend the breadth of the range.
Childrenswear contributed turnover of #1.23 million, an increase of 31.5%
reflecting the introduction of the Teddy Girl collection.
Retail
We continued to develop our retail business with sales growing by 19.5%, from
#25.1 million to #30 million. During the period we opened six stores
(Hampstead, King's Road London, Manchester, Birmingham, Richmond and Canary
Wharf), four concessions and two factory outlets. Average retail square
footage increased from 33,716 sq. ft for the period ended 30 January 2000 to
46,012 sq. ft for the period ended 27 January 2001. At the year-end, total
retail square footage was 56,378 sq. ft.
Wholesale
Overall, sales from the wholesale division rose by 46.2% to #17million with
the core UK market seeing excellent growth of 57.7%. Womenswear and the men's
"Endurance" suit performed particularly well. Overseas sales fell by 25.8%
from #1.82 million to #1.35 million, reflecting the granting of a master
licence including North, Central and South America from 1 July 2000.
The average number of trustee outlets in the UK rose from 470 to 673 and
average sales per outlet were #23,147 compared to #20,932 for 2000, an
increase of 10.6%
Licences
Licence and other income increased by 166% from #377,000 to #1,004,000
reflecting continued growth of our fragrances licence, the signing of a master
licence for the Americas and of a sunglasses licence for the UK.
During February 2000 we signed a master licence for the Ted Baker brand for
the US, Canada and Mexico. The licence was novated in November 2000 to the
Hartmarx Corporation ("Hartmarx"), a leading US quoted clothing company, and
extended to cover Central and South America. Hartmarx manufactures, markets
and distributes a wide range of licensed and own brands throughout the US,
including Burberry, Kenneth Cole, Claiborne, Nicklaus, Austin Reed and Tommy
Hilfiger. We are delighted to have appointed Hartmarx and to date our
respective teams have been integrating well. Together, we remain confident of
the long-term success of our brand in the Americas.
Sales of our licensed fragrance ranges "Ted Baker Skinwear" continued to grow
strongly, and we introduced a male fragrance for the "Endurance" collection,
which was well received.
We signed a sunglasses licence in August 2000 and the reaction to the 2001
collection, which is now available in retail stores, has been encouraging.
We have also just signed a licence and distribution agreement with Pentland
Group PLC ("Pentland") for footwear and footwear accessories. The agreement
will be world wide apart from the Americas which are covered by the Hartmarx
licence. Pentland is a leading international sports and fashion brand
management company. Its brands include Speedo, Ellesse, Berghaus, Kickers, Red
or Dead, and Lacoste footwear. We have established an exciting new presence in
the footwear market and with its extensive network of design, sourcing and
distribution offices, Pentland has the right expertise, experience and scale
of operations to build on this success and exploit the global potential of Ted
Baker footwear.
Infrastructure Investment
In April 2000 we relocated our showrooms and head office within central
London. Our new head office was designed internally by the Ted Baker team to
support and promote the Ted Baker brand in a modern contemporary environment.
We also moved to a new and enlarged warehouse totalling some 40,000 sq. ft
from our previous facility of 16,000 sq. ft. Both of these developments will
support the continued expansion of the business over the medium term and we
are delighted to have achieved the successful completion of these initiatives
with no discernible disruption to our business.
This year has been a significant one for the business. We are confident that
the investments made in infrastructure and in the additional people who have
joined our team will form an important part of the growth of the business over
the next few years as a global brand.
Finance Director's Report
Profit before taxation for 52 weeks ended 27 January 2001 increased by 3.7%
from #7.87 million to #8.16 million, reflecting significant turnover and
margin improvements which were largely offset by the infrastructure investment
outlined above and which gave rise to increased operating expenses.
Gross Margin
Retail gross margins improved from 66.9% to 67.4%. The composite wholesale
gross margin reduced from 42.6% to 41.6% as a result of a change in the sales
mix by collection although generally the underlying margins improved.
Wholesale sales grew by 46.2% compared to retail sales at 19.5% giving rise to
a composite margin of 58.0% compared to 59.3% for the prior period.
Operating Expenses
Operating expenses rose by 39.2% from #14.3 million to #19.9 million.
Distribution costs, which reflect the opening of new retail outlets and the
investment in a new distribution centre increased from #9.9 million to #13.4
million. Administration expenses rose by 47.7% from #4.4 million to #6.5
million as a result of our investment in a new head office, in our design and
support teams and our systems. The full benefit of these investments will
accrue over the medium term.
Cash Flow
Net cash flow from operating activities was #6.9 million (2000: #7.0 million)
after an increase in working capital of #3.4 million. This resulted in part
from bringing stock into the business earlier for the spring / summer 2001
season and in part from sales being below expectations during the Christmas
trading period. As a result stock levels were slightly higher than anticipated
at the period end. We remain confident that this stock will be sold through
our additional outlet stores and it is not expected to have a material adverse
impact on gross margins for the coming year.
Net capital expenditure was #4.9 million compared to #6.9 million last year
and largely reflected investment in new retail outlets, our new head office
and new distribution centre.
Treasury and Risk Management
The principal risks to the Group arise from exchange rate and interest rate
fluctuations. The Board reviews and agrees policies for managing these risks
on a regular basis. Where appropriate, the Group uses financial instruments to
mitigate these risks. All transactions in derivatives, principally forward
foreign exchange contracts, are taken solely to manage these risks. No
transactions of a speculative nature are entered into. The most significant
exposure to foreign exchange fluctuations relates to purchases in foreign
currencies.
The Group's policy is to hedge substantially all the risks of such currency
fluctuations by using forward contracts taking into account forecast foreign
currency cash inflows. There has been no change since the year-end to the
major financial risks faced by the Group or the Group's approach to the
management of those risks.
Consolidated profit and loss account
For the 52 weeks ended 27 January 2001
52 52
weeks weeks
ended Ended
27 29
January January
2001 2000
Notes #'000 #'000
Turnover 2 46,999 36,737
Cost of sales 2 (19,719)(14,970)
--------- --------
Gross profit 2 27,280 21,767
Other operating expenses (net) (18,917)(13,904)
--------- ---------
Operating profit 2 8,363 7,863
-------- --------
Interest receivable 34 70
Interest payable (242) (62)
-------- -------
Profit on ordinary activities before
taxation 2 8,155 7,871
Tax on profit on ordinary activities (2,308) (2,156)
-------- -------
Profit on ordinary activities after taxation 5,847 5,715
Minority interest - equity (13) (17)
-------- -------
Profit for the financial year 5,834 5,698
Dividends paid and proposed (2,889) (2,600)
Retained profit for the period 2,945 3,098
------- --------
Earnings per share 3
Basic earnings per share 14.3p 14.1p
Diluted basic earnings per share 13.8p 13.5p
The profit for the period was entirely derived from
continuing activities. The accompanying notes are an
integral part of this consolidated profit and loss
account.
Statement of total recognised gains and losses #'000 #'000
Profit on ordinary activities after taxation 5,847 5,715
Exchange rate movements (4) -
------ -------
Total recognised gains relating to the year 5,843 5,715
Consolidated balance sheet
At 27 January 2001
27 January 29 January
2001 2000
#'000 #'000
Fixed assets
Tangible assets 11,786 8,605
Investments 488 485
---------- ----------
12,274 9,090
---------- ----------
Current assets
Stocks 12,654 8,466
Debtors 5,838 3,243
Cash at bank 313 167
---------- ----------
18,805 11,876
Creditors: amounts falling due within one year (18,204) (10,815)
---------- ----------
Net current assets 601 1,061
---------- ----------
Total assets less current liabilities 12,875 10,151
Creditors: amounts falling due after more than - (200)
one year
Provisions for liabilities and charges - (35)
---------- ----------
Net assets 12,875 9,916
====== ======
Capital and reserves
Called-up share capital 2,063 2,063
Other reserve 910 910
Profit and loss account 9,839 6,898
---------- ----------
Equity shareholders' funds 12,812 9,871
Minority interests - equity 63 45
---------- ----------
Total capital and reserves 12,875 9,916
====== ======
Consolidated cash flow statement
For the 52 weeks ended 27 January 2001
52 weeks 52 weeks
ended ended
27 January 29 January
2001 2000
Note #'000 #'000
Net cash inflow from operating activities 6,861 7,041
Returns on investments and servicing of
finance
- interest received 4 34 70
- interest paid (210) (62)
______ ______
(176) 8
______ ______
UK corporation tax paid (2,309) (2,138)
Overseas tax paid (11) -
Capital expenditure and financial (4,882) (6,897)
investments
Equity dividends paid 4 (2,741) (2,353)
---------- ----------
Cash outflow before management of
liquid resources and financing (3,258) (4,339)
Repayment of loan (200) -
Management of liquid resources 4 - 3,000
---------- ----------
(Decrease) in cash in the period 4 (3,458) (1,339)
====== ======
Notes
1. Basis of preparation
The financial information set out above does not constitute the Company's
statutory accounts for the 52 weeks ended 27 January 2001 or 29 January 2000
but is derived from those accounts. Statutory accounts for 2000 have been
delivered to the registrar of companies, and those for 2001 will be delivered
following the company's annual general meeting. The auditors have reported on
those accounts; their reports were unqualified and did not contain statements
under section 237(2) or (3) of the Companies Act 1985. Further copies of the
financial statements will be available after that date from the Company
Secretary of Ted Baker PLC, The Ugly Brown Building, 6a St. Pancras Way,
London NW1 0TB. Copies of the financial statements can also be found online on
our investor relations site at http://ww2.investor-relations.co.uk/tedbaker/.
2. Segment information
The turnover and profit before taxation are attributable to the Group's
principal activity, the design, contracted manufacture, wholesale and retail
of high quality fashion clothing.
(a) Analysis of turnover
52 weeks 52 weeks
ended ended
27 January 29 January
2001 2000
#'000 #'000
Menswear 27,558 22,428
Womenswear 18,207 13,370
Childrenswear 1,234 939
---------- ----------
46,999 36,737
====== ======
(b) Classes of business - by divisional activity
i) 52 weeks ended 27 January 2001
Retail Wholesale Total
#'000 #'000 #'000
Turnover 29,978 17,021 46,999
Cost of sales (9,773) (9,946) (19,719)
---------- ---------- ----------
Gross profit 20,205 7,075 27,280
---------- ----------
Common operating costs (18,917)
----------
Operating profit 8,363
Net interest receivable (208)
----------
Profit before taxation 8,155
----------
Analysis of net assets
Net assets 11,041 4,837 15,878
Net financial liabilities (3,003)
______ ______ ______
12,875
______
ii) 52 weeks ended 29 January 2000
Retail Wholesale Total
#'000 #'000 #'000
Turnover 25,095 11,642 36,767
Cost of sales (8,292) (6,678) (14,970)
---------- ---------- ----------
Gross profit 16,803 4,964 21,767
---------- ----------
Common operating costs (13,904)
----------
Operating profit 7,863
Net interest receivable 8
----------
Profit before taxation 7,871
----------
Analysis of net assets
Net assets 7,106 2,358 9,464
Net financial assets 452
_____ _____ ______
9,916
c) Classes of business - by geographic origin
United
Kingdom Other Total
i) 52 weeks ended 27 January 2001 #'000 #'000 #'000
Turnover 45,651 1,348 46,999
Cost of sales (19,067) (652) (19,719)
---------- ---------- ----------
Gross profit 26,584 696 27,280
====== ======
Common operating costs (18,917)
Operating profit 8,363
Net interest payable (208)
----------
Profit before taxation 8,155
======
Analysis of net assets
Net assets 15,790 88 15,878
Net financial liabilities (3,003)
______
12,875
______
ii) 52 weeks ended 29 January 2000
United Other Total
Kingdom
#'000 #'000 #'000
Turnover 34,914 1,823 36,737
Cost of sales (13,617) (1,353) (14,970)
---------- ---------- ----------
Gross profit 21,297 470 21,767
====== ======
Common operating costs (13,904)
----------
Operating profit 7,863
Net interest receivable 8
-----------
Profit before taxation 7,871
======
Analysis of net assets
Net assets 8,901 563 9,464
Net financial assets _____ _____ 452
9,916
______
Turnover outside the United Kingdom predominantly related to the United
States. Turnover by destination is not materially different from turnover by
origin.
3. Earnings per share
Earnings per share for the 52 weeks ended 27 January 2001 and 29 January 2000
have been calculated on profit on ordinary activities after taxation and after
minority interests being #5,612,000 for the 52 weeks ended 29 January 2000 and
#5,782,000 for the 52 weeks ended 27 January 2001 and the weighted average
number of Ordinary Shares outstanding being 39,903,521 Ordinary Shares of 5p
each for the 52 weeks ended 29 January 2000 and 40,520,401 Ordinary Shares of
5p each for the 52 weeks ended 27 January 2001.
Own shares held by the Ted Baker Group Employee Benefit Trust and the Ted
Baker 1998 Employee Benefit Trust have been eliminated from the weighted
average number of Ordinary Shares and dividend income received by the Company
as a result of holding these own shares has been eliminated from the profit on
ordinary activities after taxation and minority interests.
Diluted earnings per share have been calculated using an additional 1,491,212
(2000: 1,558,635) Ordinary Shares of 5p each, available under the 1997
Unapproved Share Option Scheme, the 1997 Executive Share Option Scheme and the
Ted Baker Performance Share Plan.
4. Consolidated cash flow statement
(a) Reconciliation of operating profit to operating cash flows
52 weeks 52 weeks
ended ended
27 January 30 January
2001 2000
#'000 #'000
Operating profit 8,363 7,863
Depreciation charges 1,832 927
Loss on sale of tangible fixed
assets 59 137
Increase in stocks (4,188) (3,203)
Increase in debtors (2,595) (1,553)
Increase in creditors and
provisions 3,390 2,870
---------- ----------
Net cash inflow from
operating activities 6,861 7,041
====== ======
(b) Analysis of cash flows
Capital expenditure and financial investment
Purchase of tangible fixed
assets (5,237) (6,412)
Sale of tangible fixed assets 179 91
Sale of own shares 176 -
Purchase of own shares - (576)
----------- ----------
Net cash outflow (4,882) (6,897)
====== ======
Management of liquid resources
Cash withdrawn from
term deposits - 3,000
---------- ----------
Net cash outflow - 3,000
====== ======
(b) Analysis of cash flows (continued)
Reconciliation of net cash flow to movement in net funds/(debt)
(Decrease)/increase in cash in the
Period (3,458) (1,339)
Cash used to decrease liquid
resources
- (3,000)
---------- ----------
Change in net debt (3,458) (4,339)
Net debt at start of (33) 4,306
period ----------- ----------
Net debt at end
of period (3,491) (33)
====== ======
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